Supply & Diimand

Another wave of Nintendo’s Amiibo figures launched at the end of May, but if you walk into your local game store you might not see any confirmation of that. What stock was available was quickly decimated by savvy gamers and scalpers. (I had an opportunity to look for the Lucina figure about an hour after stores opened and there was hardly any new stock available, save the less popular options.)

If you’ve heard anything about these little plastic cash-sinks (on this blog, for instance) you should not be surprised. Nintendo’s supply has been laughable from the product line’s launch in November; every subsequent wave has been met with consumer frenzy; and opportunistic merchants have pillaged stores for eBay fodder. If you knew nothing about the figures and saw their display in a store, you might think Amiibo were only for the classic characters of the Super Mario franchise – not for lesser known characters appearing in Smash Bros, like the Animal Crossing Villager or Fire Emblem protagonists.

The situation is officially out of hand now.

I eventually found one off Kijiji, from a rare re-seller who didn’t charge triple MSRP.

Organized Chaos

After the frustrations of the first launch, it was easy to point fingers at Nintendo for under-stocking retailers, or at a port strike in the US for clogging up imports. The Big N was simply following its usual business practices, however. It’s been a long-standing tactic to keep supply low in order to drive demand higher – it’s Business 101 executed immaculately. It worked for the Super Nintendo, it worked for the Wii, and it’s worked incredibly well for Amiibos.

I was disappointed in Nintendo at the start too. To undersupply consoles, or even games, is one thing; they sell at a higher price at a one-time-per-household rate. The Amiibo, however, are a much cheaper collectible item. The dedicated collector wants to obtain at least one of each (the obsessive might get two, one to use and one to preserve); the casual gamer who hops on the bandwagon probably wants two or three of his favourite characters.

It seemed, back in November, like a pretty big blunder. One of the hottest figures was for Marth, a staple of the Smash Bros competitive scene for over a decade, and his figure remains unattainable. I will forever kick myself for not buying one at the Smash Bros for Wii U midnight launch – but that’s the rub. “That figure looks cool, but I don’t need it right now,” I told myself. “I’ll try out the Link figure, and if these things are fun maybe I’ll grab him later.” Silly me for assuming a company would supply its product sufficiently, right? I’ve got a small cluster of Disney Infinity figures and have never had a problem finding a specific one. As Disney Infinity 3.0 producer John Vignocchi recently said, when asked if his game would be affected by the Amiibo craze:

There is never an intention to create a shortage of any [Infinity] figures. It is irresponsible and rude to your hardcore fans. They don’t want to create frustration or the hunt. So they will be stocking the shelves well!

This is what displays should look like.

Now, however, it’s important to remember this was (mostly) a deliberate move by Big N. In a way, the current sky-high demand for the plastic statues is ideal for them. The masses clamour and scour stores weekly in hopes of finding that elusive piece for their collection. Once again Nintendo has smartly played the market – but it’s time to change strategies.

The Lunatics Run the Asylum

An Amiibo retails for $14 CDN. Ideally you should be able to walk into a store and pay $42 to pick up the Marth, Villager, and Wii Fit Trainer figures. Instead, look at the reality in this eBay listing:

Yup, these figures (called “the Holy Trinity” by some) as a lot go for nearly ten times the MSRP. If this seller paid retail price for them, he stands to make about $330 off the sale, by Canadian dollar standards.

And this is the problem with the ongoing Amiibo shortage. Demand is through the roof, certainly higher than even Nintendo’s most optimistic executive hoped, because of the artificial shortage – mission accomplished there. But now it’s not Nintendo making money off the product, it’s the legion of scalpers and hunters snapping up rare figures and exploiting others for insane profits.

Back in 1991, Nintendo could withhold Super Nintendos from retailers to ensure its subsequent shipments would be snapped up quickly without much interference from opportunists like this. The internet didn’t exist and scalpers could only prey upon people nearby. eBay and its ilk allow these sharks to exploit people all around the world nowadays.

Now, whenever someone sells a Marth figure for $100 or more, the bar is pushed a little bit higher. One shark sees another score that price and starts his auctions around the same price.

I’d wager that the vast majority of these opportunists aren’t even Nintendo fans, or at least have no interest in the actual application of the figures. So they score the figures at retail price and sell them back to dedicated fans or collectors for many times their investment – and now both fans and Nintendo are losing out. An incredible greed has accumulated around the entire Amiibo line, and it’s become little more than a cash-grab for opportunists.

Show Us Riispect

Nintendo truly needs to step up its production game now. The product is a great success in supply/demand terms, yes, but the company is no longer profiting from their own success. Those $330 profits aren’t coming back to them, or their retailers. Worst of all, there’s a wall of extortion between their dedicated consumers and their product. The Big N does itself and its customers a disservice. It’s past time to abandon the artificial shortages and get sufficient stock back on the shelves, or else scalpers will continue to exploit both supplier and consumer.